Small formula based ERP suggestions

I've just started trying to find a replacement ERP for our company. The one we have has been in use since the early 90's, hasn't been supported for ages and we're having trouble keeping it working with new hw and sw.

We are a small chemical, paint and hardware manufacturer based in NZ. We have about 50 employees; only about 10 required access to the system. We have 8 locations in two countries.

So assuming we only look at sw list costs(formulas, production, quality and batch tracking, stock control, and full financial) what vendors are available under:
50K?
100K?
150K?

I'm really just looking for a place to start evaluating the packages. Most vendors don't publish any kind of price so you can't tell what the target market is. We are definitely price sensitive.

>
>
> Hi everyone,
>
> I appologize if this is answered or a poorly written question.
>
> I've just started trying to find a replacement ERP for our company. The
> one we have has been in use since the early 90's, hasn't been supported
> for ages and we're having trouble keeping it working with new hw and sw.
>
> We are a small chemical, paint and hardware manufacturer based in NZ. We
> have about 50 employees; only about 10 required access to the system. We
> have 8 locations in two countries.
>
> So assuming we only look at sw list costs(formulas, production, quality
> and batch tracking, stock control, and full financial) what vendors are
> available under:
> 50K?
> 100K?
> 150K?
>
> I'm really just looking for a place to start evaluating the packages. Most
> vendors don't publish any kind of price so you can't tell what the target
> market is. We are definitely price sensitive.
>
> Thanks for your input!
>
>
>
>
>
>
>
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Just as a point of self qualification - my firm has been working in the
formula manufacturing software business for 15+ years with about 150
paint/chemical/food clients. We have worked with most of the products
on the market for companies in the $5M - $150M space. With that I would
consider myself fairly knowledgeable on your situation.

There are a few off the shelf products you should consider before
turning to a custom solution. The king of the hill in the 80's and 90's
is all but gone. This occurred through acquisition by a larger ERP
solution. My sense is you are running that product. Most of our
clients were on that application as well.

We have moved the majority of our clients to a Microsoft Dynamics
platform and have focused on the NAV, GP and SL offerings. AX is a
great product but tends to be a bit big for the smaller companies as you
describe yourself.

It is fair to say I have put my eggs in the Microsoft basket. So while
I have worked with most of the solutions I do have a bias toward
Microsoft. (disclaimer)

To that end I would suggest that you should consider some of the
vertically oriented extensions to the Microsoft Dynamics product line.

Unlike some other ERP developers that attempts to address all verticals
internally Microsoft has decided to provide core functionality in their
ERP solutions and support vertical developers to extend into more narrow
specialized markets - such as paint/chemical. These extensions are
pre-packaged solutions (not customizations) and most have been through
extensive testing through a Microsoft certification process.

My firm has adopted the Microsoft Dynamics solution and has extended it
using a vertical manufacturing solution called Vicinity
(www.vicinitymanufacturing.com). That extension was written
specifically for formula based manufacturers (paint/chemical/food). We
have been very happy with the results.

The Microsoft Dynamics solution is now sold by the concurrent user and
ranges from $2k - 4k per concurrent user depending on the level you buy
into. Of course consulting and implementation are on top of that
figure. I would put a Dynamics solution in the range of $50-100k for 10
concurrent users and depending on your requirements could be scaled down
below the $50k limit for 10 users.

For your size company there really is little reason to look much beyond
$100k for a basic financial/distribution/manufacturing offering.

I hope that helps. I will be happy to share additional information
offline if requested.

No product is ever going to save money if it's not a fit
to the business. How about explaining how that ERP fits
the business. Then we also have to realize no matter how
much the initial savings may be in license costs, there
are still lots of costs in services. In the end, a full
analysis of the costs of those customization, implementation
and training services are compared to the benefits coming
from the fit to the business.

No product, no matter how free is ever going to save a company
money if you have to spend millions to make it work for the
business. It's not about "open source" but what the best
ROI is, and that's about individual solutions not whole
categories of them.

Let's get back on track and talk about how that individual
solution ties to the requirements. (and there's not
much of a set of requirements to go on, which is another
question - you have only the general industry and a few
modules which any ERP for that industry would have)

I know it was already commented that the original post
specifically said the exact opposite - they're process,
not discrete.

But I'd like to further comment that just because they're
in the same "category" hardly means it's even close
to being a fit. Just because a car manufacture is
discrete and so is a make of heart stents doesn't
one solution is an instant fit for both. Even solutions
made for the same industry are often not a fit for
all companies.

The selection process is about detailed
requirements and not enough have been given so far.

In addition to looking at the Dynamics product lines, you should
also take a look at the SAGE MAS 500 solution. Muck like
Micorsoft, Sage relies on partners for verticalization. Sage
has the core functionality well under control for financials,
distribution and discrete manufacturing and I would imagine your
financials and distribution are pretty straightforward but your
manufacturing processes for both process and discrete (MIXED
MODE) is probably where your complexity lies. There is an
add-on for MAS 500 called "O2" that is developed by a company
called "Escape Velocity Systems" or "EVS". They are based in
Colorado and their O2 solution was developed for MAS 500 -
www.evs-sw.com . It is worth a look and based on what you
mentioned for user count your are within the budget range of
$100K/$125K.

I will add the disclaimer (to keep the consultants happy - and to
let them know that I am a responsible sales person) that every
situation is different and that specific attention should be
paid to what you need, not just what the software can do for
you. No solution will do everything but the way some of these
applications are shaping up in today's market, users are getting
"many more of their requirements met out of the box" than just 5
years ago.

Good luck and keep digging. If I can add any additional please
let me know.

No worries - I'll comment later where I think maybe you
can help with some more details. But believe me, you're
ahead of others just starting out with their questions.

>I've just started trying to find a replacement ERP for our company.
>The one we have has been in use since the early 90's, hasn't been
>supported for ages and we're having trouble keeping it working with
>new hw and sw.
>
>We are a small chemical, paint and hardware manufacturer based in
>NZ. We have about 50 employees; only about 10 required access to the
>system. We have 8 locations in two countries.
>
>So assuming we only look at sw list costs(formulas, production,
>quality and batch tracking, stock control, and full financial) what
>vendors are available under:
>50K?
>100K?
>150K?
>
>I'm really just looking for a place to start evaluating the
>packages. Most vendors don't publish any kind of price so you can't
>tell what the target market is. We are definitely price sensitive.
>

Some general comments first - if all you're looking at
to begin with is price, this is going to be a very
frustrating process for you. You have to look
at the return you're going to get from the solution
you pick. Don't think of it as simply spending
$50k, you have to think in terms of spending $50k
to make $200k. What company doesn't want to make
$150k? If the decision makers only look at it
like an expense, you're sunk already.

Other general comment - also go over this recent
thread about selling upper management. Is that
you? Or is the decision maker already on board?
If not, you need to do that before, not after,
a selection process.

Now how do you go about getting return? You're
on a basically "dead" system from the sounds of it.
What kind of negative "return" are you going to get
if that system fails and you have nothing? In other
words, "what is it worth to the company to have a
working system"? Many companies would go out of
business, or at a minimum have a lot of layoffs.
With that kind of severity, you'd think getting to
a new system would not be that hard so the question
is which one has the most value to you?

Sit down and figure out the areas of the business
that need improvement, and assign a $ value to what
it would be worth to have those issues fixed.
That should get you over a hurdle of just being
"price sensitive" to "show me the value".
There's nothing wrong with that - all companies big
or small benefit from it.

So the generalities are over with - like many of the
things I can agree with on RSmith's post, I too have
to be up front and say we make a solution for formula
based ERP, ProcessWareERP (www.processwareerp.com)
for companies just your size, customers in
the paint and chemical industries (including one of
India's biggest Berjer), etc. etc. I agree
that pricing above 150k is not needed, but actually
I'll say that most systems today are under a lot
of competition. Prices are down, and $2k-$3k is
now fairly expensive. Our is less than that for
example.

That said you need to figure out which of the available
systems, whether that includes ours, RSmith's, or
any number of others. Now it's not just a matter of
the modules you listed - formula based systems with
batch manufacture/lot control that goes with it
are likely to all have those. But a system that's
perfectly great at food isn't necessarily going to
work with chemicals. They're both formula based,
but a few grains of salt different in a recipe for
spaghetti sauce is one whole different thing comparing
a couple of milligrams of tint off on making "sky
blue" gives you "admiral blue" and you're quality
control is gone to the dogs. So you have
to separate off the things that make your business
tick. Assign priorities of what's positively required
and what's just nice to have if it comes along.
Those things you decided need fixing become big
priorities because they have enough value to buy
one solution vs. another.

Post those. Get into some details of your
business process/flow. Are you work centre based?
What kind of staging and routing? What Q/A methods do
you use and is it lot based, sample based, or some
combination? How do you organise the locations
into various companies, divisions, etc?
What kind of Regulatory Compliance do you need?
(you didn't mention that in the email, but I know
from industry experience you're going to need it)

Take all of those answers, post them, and folks
with systems or suggestions of systems that will
fit will come back to you. Sit down with them
and go over how their product fits your needs.
Any holes, discuss the costs to fill them.
Gather up all the system's costs, and compare
with what you said it would be worth to fix
the problems. Which one has the highest difference
between their worth and the costs? That's highest
return, add in the questions about the vendors
and their ability to support you, their general
fit to the way you conduct business, etc.
and come up with a winner.

Building from the scratch, when there are already proven and tested software in the industries with wide installed bases?
I have always maintained that customization should be minimum. May 10-15% to the software. Re inventing the wheel is not the way to go.
Robert

John,
No offence meant, you are too eager a saleman, that you failed to consider the needs of your prospect.
You have broken the first rule of salemanship.
1. Listen to your customer/prospect.
2. Listen to your customer/prospect.
3. Listen to your customer/prospect.
Then reccomend a suitable solution.

Noy only you have not read/listen to Kiwi, but you have reccomended somethings opposite of what he ask for.
Robert

Pricing is something that needs to be worked out on a case to case basis.

The cost of License is a straightforward calculation which you may
know upfront. However, cost of implementing an ERP is something that
need to arrived at with detailed study of your environment.

For eg, a company implemented an Open Source solution for USD30k in
India for a startup Pharma company in one location while there was a
SAP project was going on at another large Pharma company for a cost of
USD 1 Million with 7 countries and 11 locations involved.

The start-up Pharma company was gaining access to a fully integrated
Sales Force Reporting developed for their needs. However the project
was unsuccessful as the start-up was unwilling to spend another 20k
for fine tuning the solution and for further training of staff for
effective usage.

The choice is yours, Do-it-Yourself or get the experts to do it for
you with a premium paid.

Answers to some questions from the list and more details follow at the
end.

The decision maker is on board, he just wants help making the right
decision and so do I! We know that at some point (probably the next OS
change from SBS 2003) our current system will have issues that will be
at the least very hard to solve. So for safety we'd like to upgrade
sooner than later.

I realize that my request for products at cost is incomplete. I expect
our sw license cost to come in at some figure and the implementation
cost to be extra (1:1, 2:1?). My request for costs is just to be in the
right ballpark.

The responses with specific products have been very helpful. Otherwise
I'm stuck googling for products (often far to big) which is certainly
time consuming. Knowing what features I get for what price will help me
identify areas in the business that could be improved. If the sw falls
in my ranges I can likely make a ROI case that is reasonable.

Your suggestions for reasons that drive this type of decision are great.
Everytime I've done this in the past its really been driven by what
features we wanted and I knew what they all were so matching features to
price and overall human interface was the only issue.

Now more details (I'm still figuring this out by going through current
processes):

We are not interested in building our own and are happier to change our
processes to match a sw program than the other way. I wasn't planning to
examine open source options.

Our processes are pretty simple and should not require large
customization. We don't have a large IT staff so constant
maintenance/customization is not an option.

Our current program manages materials/inventory, formulas, purchasing,
production, and order entry. The accounting system with it is poor so a
separate system is used and there is a fair amount of replication. Ug.

Things that we don't need in the new system:
- MSDS and compliance, which is handled for us by a 3rd party

Things we do with the current system and need to continue:
- Drive production from finished goods inventory levels and custom
orders
- Drive purchasing from inventory levels and production forcasts
- Manage our formulas with revision control, history, QC, batch
tracking, yeilds
- Record production and batches
- Perform formula comparisions, material subs, costing etc
- Sales order entry

Things we want to do with a new system:
- Integrate the finance and production systems
- Manage both discrete and simple BOM based items (very few are actual
BOMs most are really just finished goods)
- Manage recanning and work off
- Labelling (currently a separate system)
- Implement integrated warehouse control and bar coding on all products
- Implement integrated sales interfaces for the warehouse/store fronts
- Implement a web sales site

It looks like you can either buy an add on or a complete solution. I
tend to think the complete solution from a smaller vendor is more risky.
Mainly because you don't have as many people using the accounting side
(makes replacement/temp workers harder to find) and it may not be nearly
as good as the big packages.

At the moment I like the idea of a module used with MS dynamics GP or
SL. There seem to be a few vendors integrating that way which gives
protection if a company fails or product doesn't work out.

Do consider BatchMaster Enterprise, the original ERP solution for the process manufacturing industry [www.batchmaster.com].

BatchMaster has been the preeminent provider of process manufacturing solutions for more than twenty years. BME can interface with the financial software of your choice including Dynamics GP, SL, NV, Accpac, SAP B1 amongst many others.

You will get the benefit of multi-level formula management with advanced costing analysis providing you with multiple 'what-if' scenarios. Regulatory compliances include HACCP, cGMP, Allergen management etc.

Quality Control is tightly integrated at each stage like purchase, sales, and production. You get end-to-end lot traceability to have a 360 degree view of your inventory.

I wish I had more clients with your grasp of the issues. I feel you are
right on track in communicating your issues and understanding your
process.

I support your thought that writing your own application or performing
significant customization really is not needed in your vertical niche.
The primary issues have been addressed by other firms over the past 20
years.

In the formula based sector there are a few significant players below
the $150k price point. Some have been around a while and others are
newer.

From my experience these application fall into 2 main camps. All in one
solutions and add-ons to much larger ERP systems. Each camp has its
advantages and disadvantages. You clearly see at least some of those
already.

All in one - Deacom ($150k is min), Processpro (actually integrates to
Accpac but is sold as one) and Batchmaster (the Sage product - began as
add-on)

I am the Sales Manager at Datacor / _www.datacor.com_
(http://www.datacor.com) / 973-822-1551. We are a software developer and our sole industry focus
for the past 25 years has been Chemical Formulators. Our ERP software named;
Chempax has been installed in over 800 Chemical companies over the past 25
years. We can meet your stated requirement and depending on the number of users,
I am confident we can meet your budgetary goals.

We've been looking at batchmaster. However a number of companies we've
spoken with have switched away from it. I don't think that there will be
any NZ companies in our industry using it very shortly, which makes me
worry what might be happening elsewhere in the world. Product support
from the local reps seems to be a major complaint. Though I don't
believe complete solutions was the partner before.

In any case, we will have to have a closer look as it fits our
requirements as I have them so far.

Yes, in evaluating ERP software, apart from a good installed base, the local
support is very important to look at no matter how great the software may
be. It is important to see the big picture on the commitment of the Software
Publisher. Some software's principle may enter into a region, have a few
installed sites, and finally withdraw from that market entirely. Provide
their partners with inadequately support & training. The partners are now
trying their best to cope with complaints. . As a result, the end user
suffers and losses in their investment.
Best Regards
Robert

>Answers to some questions from the list and more details follow at the
>end.
>
>The decision maker is on board, he just wants help making the right
>decision and so do I! We know that at some point (probably the next OS
>change from SBS 2003) our current system will have issues that will be
>at the least very hard to solve. So for safety we'd like to upgrade
>sooner than later.

Great, sounds like a good partnership with the management.

>I realize that my request for products at cost is incomplete. I expect
>our sw license cost to come in at some figure and the implementation
>cost to be extra (1:1, 2:1?). My request for costs is just to be in the
>right ballpark.

These days it's not a hard and fast rule, but if you take
the whole set of services, which is both implementation, and
training, with some set aside for a few customisations
(never above 10% or so otherwise you've chosen the wrong
product), a rough guesstimate is supposed to be 50% of the
licenses. Our solution tends to run a bit below that
because of fairly easy setup, so we often project something
like 30-40% including the old system conversion.
So without knowing more, a total system cost might
be like 50-60k in your case, hardware excluded.

>
>Now more details (I'm still figuring this out by going through current
>processes):

Don't. The decision to change the process is one for
the business to make. No software should ever make you
do that. But if the process does need to change to
make the company grow, then don't let anything, software
or not, stop you from getting to the best processes
available. If you're not sure whether your current
processes are solid or not, you need a completely separate
project for some kind of review. Don't attempt both
at the same time.

>Our processes are pretty simple and should not require large
>customization. We don't have a large IT staff so constant
>maintenance/customization is not an option.
>
>Our current program manages materials/inventory, formulas, purchasing,
>production, and order entry. The accounting system with it is poor so a
>separate system is used and there is a fair amount of replication. Ug.
>
>Things that we don't need in the new system:
>- MSDS and compliance, which is handled for us by a 3rd party
>
>Things we do with the current system and need to continue:
>- Drive production from finished goods inventory levels and custom
>orders
>- Drive purchasing from inventory levels and production forcasts
>- Manage our formulas with revision control, history, QC, batch
>tracking, yeilds
>- Record production and batches
>- Perform formula comparisions, material subs, costing etc
>- Sales order entry
>
>Things we want to do with a new system:
>- Integrate the finance and production systems
>- Manage both discrete and simple BOM based items (very few are actual
>BOMs most are really just finished goods)
>- Manage recanning and work off
>- Labelling (currently a separate system)
>- Implement integrated warehouse control and bar coding on all products
>- Implement integrated sales interfaces for the warehouse/store fronts
>- Implement a web sales site

*That's great*. This kind of list is what so many other
folks are lacking. You're right - it does seem like
a fairly straight forward type of chemical related
business. One that a non-process mfg and even a
non-chemical system isn't going to handle. But
on the other hand, simple enough chemical that
most systems will handle it.

You shouldn't be doing your own MSDS - the cost
of systems just to do that are through the roof
kind of unrealistic. And it's way too easy to
put that off on your suppliers, or download from
the web. Formulas that carry right through to
the costing is a chemical cornerstone. Not
surprised that comes out so clear in your
requirements, not surprised at the labeling
either. ProcesswareERP does all the things
you've listed.

>It looks like you can either buy an add on or a complete solution. I
>tend to think the complete solution from a smaller vendor is more risky.
>Mainly because you don't have as many people using the accounting side
>(makes replacement/temp workers harder to find) and it may not be nearly
>as good as the big packages.

Don't count that out either. Our solution is not an add on,
its priced very competetively, not the $100k or more ones.
But the financials are a very strong point of ours as well
as chemicals and paint in particular. We created the product
based on accountants' requirements and conform to Global
FASB standards. Our financials are strong enough we
can market them on our own. (this is not adding on,
but splitting apart for non-chemical co.s)

You are correct that there are advantages, and having a
product that's been in front of many more users does
help that. But also remember there are disadvantages
as well.

It's not always true that you can just pick up
change your system to another using the same base
just because it was an add on. There are different
types of add on's and partnerships between those
kinds of software developers. Some are so loose that
the accounting vendor is hardly aware because they
offer import/export that doesn't require a business
relationship. Others are so tight, using programming
methods that make it look like a single solution
and the companies have signed co-marketing agreements.
And there is anything in between. You need to know
which to be able to evaluate what is an advantage
and what is not.

But in either case, if the system covers something
like Order Entry (don't know what doesn't), then
the system has to somehow have a way to check up
on what's in stock based on COA. A basic accounting
system just isn't going to have that. So either
it's an *entirely* different module in which case
you're totally dependent on the maker and not the
big accounting company. If it's very tightly
integrated using some programming methods, then
it becomes its own product that you can't untangle.
(not that you would, you would lose the benefits)

I think RSmith had said the same things, best to look
at each and evaluate the systems based on their strengths
and weaknesses as well as the vendors. When you do
that with add-on systems, remember you need to evaluate
both vendors, not just one. The advantages of add ons
are there, but you have to be equallly diligent in your
choice of vendors because you're just as dependent
on both.

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